Pelican plans out-of-town buying spree with pounds 7m

Click to follow
PELICAN Group will expand beyond its London base as it pushes to increase the size of its restaurant chain by more than a quarter to 60 outlets by next March.

'We have pounds 7m left from the recent pounds 20m rights issue, and I'm trying to spend it as fast as I can,' said Roger Myers, chairman, announcing results for the year to March.

Profits before tax jumped from pounds 798,000 to pounds 2.1m, reflecting a tripling in the number of its restaurants to 47 and a pounds 210,000 reduction in net interest charges to pounds 135,000.

Mr Myers said: 'All the restaurants are profitable. Meal prices have not really changed with people still being careful with their money but sales volumes have increased.'

The industry has been knocked by the recession and growing competition from pubs, forcing restaurateurs to cut meal prices to attract customers. The average cost of a lunch in one of the 20 Cafe Rouge restaurants run by Pelican is pounds 7.50 a head, and pounds 15 for dinner.

Group sales in 1993/4 rose from pounds 8.1m to pounds 16.5m.

Pelican has started to introduce the Cafe Rouge format outside London through the conversion in Cambridge and Oxford of two of the 13 Dome outlets bought recently from Forte.

'The sensible way to expand is to fan out from London, in towns like Brighton, Guildford, and up the A1 in places like St Albans,' Mr Myers said.

Pelican has also struck a franchising agreement that allows Granada, the leisure company, to put its 1950s-style Rock Island Diners in 22 motorway service stations. The concept will be tested at the Tamworth service station in Staffordshire.

Shares in the USM-quoted company firmed 2p to 91p. The dividend is being lifted from 1.1p to 1.25p, covered nearly four times by earnings per share of 4.9p.